The rapidly growing organic industry petitioned the USDA for a referendum to create a checkoff program to pay for research and promotional work to expand production and sales. The checkoff, to be called the Generic Research and Promotion Order for Organic, or GRO Organic, would be the first such program dedicated to a production method. Two-dozen checkoffs, focusing on products from pork, cotton and popcorn to mangos and watermelons, are in operation and have spawned advertisements such as “Got Milk?” and “Beef – It’s what’s for dinner.”
“It’s a big step,” said Laura Batcha, chief executive of the Organic Trade Association, which filed the petition in collaboration with the GRO Organic Core Committee. The USDA could take 12-18 months to examine the petition, publish notices of the proposed program, call the vote and announce the results.
The “broad and shallow” assessments proposed for the checkoff would generate about $30 million a year. A 17-member board with 16 voting members, half representing producers and half representing handlers, would oversee the program.
During a telephone news conference, OTA leaders said a checkoff would attract more producers and processors while burnishing the value of the USDA Organic seal that appears on certified organic products. Organic production is not keeping up with demand, said Batcha. Sales of organic food and other products topped $39.1 billion in 2014, up 11 percent in a year. Food accounts for the bulk of organic sales.
According to a USDA tally, there are 19,474 certified organic operations in America, up 5 percent in a year. OTA said 5,000 organic farms and businesses took part in discussions leading to the request for a checkoff program, and that most supported it.
The checkoff would apply to all producers and handlers with more than $250,000 a year in gross organic revenue. Smaller operators would have the option to join the program.
Only those who pay an assessment would be eligible to vote on establishing a checkoff or to elect board members. Under OTA’s proposal, the checkoff would go into operation if approved by a simple majority of votes cast in the referendum.
Doug Crabtree, an organic farmer from Idaho, said adjustments to the formula for assessments reduced the annual revenue for the checkoff by $10 million annually. Producers have the choice of two ways to calculate the amount due; one allows deduction of production expenses. “It makes it more fair across the supply chain,” said Crabtree.
Overall, the assessment would be one-tenth of 1 percent of net organic sales by handlers, manufacturers, packers and importers. For producers, assessments would be based on net organic sales or net profit.
A checkoff program has been debated for at least three years. OTA backed a provision in the 2014 farm law that allows an industry-wide program.
In mid-March, Harvest Public Media said “a battle is brewing in the organic food industry” over the checkoff. “The OTA is the loudest voice for the organic industry in Washington, DC, with a focus on policy and lobbying. The organization counts some of the largest food companies in the country among its members. But that cozy relationship with big business rubs some farmers the wrong way.” Some skeptics say big food companies would benefit the most from a checkoff.
The New England Farmers Union adopted a policy plank at its annual meeting saying that a referendum on an organic checkoff “must be transparent and adoption must be dependent upon approval by a majority of organic producers.”